Free trade must be a two-way street

The future of American manufacturing and the millions of jobs it provides depends on the successful competition of American-made goods in foreign markets. Toward that end, we support free trade agreements that give participating countries the chance to compete on a level playing field, where no country has an unfair advantage over another.

Give American workers a fair chance to compete anywhere in the world, and they will succeed, helping our economy to thrive and create new jobs and opportunities. But a fair chance means everyone plays by the same rules, rules that make certain the trade agreements we make are fair as well as free.

{mosads}The American textile and apparel industry has agreed to past trade agreements in instances when they ensured parties to the agreement could sell their goods and services in each others’ markets as long as each country abided by the same set of effectively enforced rules. Those agreements resulted in greater demand for American textile and apparel exports and, consequently, greater job growth in the industry.

The textile and apparel sector employs more than 500,000 Americans in every part of our country, many of them in rural areas hardest hit by the recent recession and where well-paying jobs are scarcest. Textile and apparel manufacturing jobs typically pay much higher average wages than do jobs in service and retail industries, and they offer better health and retirement benefits as well. The industry’s continued growth is vitally important to families in communities where textile mills operate, as well as to communities where our suppliers and domestic customers are located.

The U.S. is currently negotiating a new trade agreement, the Trans-Pacific Partnership (TPP), with 10 other nations: Canada, Mexico, Chile, Peru, Australia, New Zealand, Brunei, Singapore, Malaysia and Vietnam. By reducing tariffs and duties and eliminating other trade barriers, the TPP could lead to even greater demand for our textile exports, and to greater job creation in the U.S. But to achieve that, the TPP must adhere to the same rules on textiles as our previous trade agreements.

American jobs should be the first priority for American trade negotiators, just as job growth in their countries is our trade partners’ first priority. Opening markets to exports benefits everyone, but we shouldn’t forget that trade agreements are first and foremost job-creating policies, not foreign assistance programs.

One country involved in TPP negotiations — Vietnam — is seeking an unfair advantage over the U.S. and our other trade partners. It could cost the jobs of over 1 million textile and apparel workers in the U.S. and among our trading partners throughout the Western Hemisphere and Africa. We call on the Obama administration to insist that the TPP follows the successful practice of previous free trade agreements, which included a “yarn forward” rule of origin to ensure that only textile and apparel manufacturers in the countries that are party to a free trade agreement enjoy the benefits of the agreement.

“Yarn forward” requires that the yarns, fabrics and final garments exported within the TPP are produced in TPP countries. Vietnam wants to replace the “yarn forward” rule with a “flexible rule of origin,” which requires that only the sewing of a garment must be done in TPP countries. This would allow Vietnam’s state-owned industry to export apparel duty free to the U.S. and the other markets of the TPP made from yarns and fabric imported from the massive state-owned textile industry in China, which is not part of the TPP.

The “yarn forward” rule has been an essential component of every free trade agreement the U.S. has negotiated over the last 25 years, and it has created over $25 billion in two-way trade with our trade partners. This trade supports nearly 2 million jobs. Replacing it with a “flexible rule of origin” would more than quadruple Vietnamese exports to the U.S. while driving American textile and apparel jobs to Asia. Our Western Hemisphere free trade partners and African Growth and Opportunity Act partners would be big losers as well.

And, indefensibly, it would inevitably result in the outsourcing of more than 8,000 textile and apparel products made today by U.S. workers and U.S. companies for the U.S. military to Chinese manufacturers. These products amount to more than $2 billion a year in vital equipment for our fighting men and women. 

We cannot support a trade agreement that gives one country and its state-owned and subsidized industry such an enormous and unfair advantage over privately owned American businesses and their workers, and gives an undeserved boost to a government-owned industry in a country that is not even a party to the TPP. The “yarn forward” rule must remain intact with no loopholes in the TPP.

Furthermore, as we have done in previous free trade agreements, the U.S. should insist that the TPP include extended tariff phase-outs for goods produced in TPP countries that heavily subsidize their apparel industry, as is the case in Vietnam. We should also require the agreement include an electronic customs enforcement system that will prevent countries from cheating.

With these provisions, the textile section of the TPP could be a landmark achievement for proponents of free and fair trade and an engine of job creation in the U.S. and all TPP countries. Without them, hundreds of thousands of American workers could lose their livelihoods to workers in countries that believe free trade is a one-way street. Now, more than ever, America must demand fair treatment for American made goods and for the rules and benefits of genuinely free and fair trade.

Coble has represented North Carolina’s 6th congressional district in the House of Representatives since 1985. He serves on the Judiciary and Transportation and Infrastructure committees, and is co-chairman of the Textile Caucus. Pascrell represents New Jersey’s 9th congressional district and has served in the House since 1997. He sits on the Budget and Ways and Means committees, and is co-chairman of the Textile Caucus. Mulvaney has represented South Carolina’s 5th congressional district since 201. He serves on the Financial Services and Small Business committees, and is a member of the Textile Caucus.